2 Different Approaches to Bidding Rules

This approach uses historical keyword conversion performance to calculate an optimum bid and adjust keyword bids toward your Target ACOS.

Instead of applying the same adjustment to every keyword, Scale Insights considers each keyword's performance to determine an appropriate bid.

How it works

Scale Insights calculates the optimum bid using one of the following methods:

• Keyword Revenue Per Click (RPC): Once a keyword has generated sales, the system can use its actual revenue per click and your Target ACOS to calculate its optimum bid.

• Associated ASIN Selling Price: When the keyword has no sales, the system uses the associated ASIN's selling price and the applicable conversion data to calculate its optimum bid.

You can enable Optimize Bid using Keyword Revenue Per Click to use actual keyword revenue per click when calculating the optimum bid for keywords with sales.

For more details, see How to Calculate the Optimum Bid.

Example use case

Suppose you're running two keywords for the same product, with a Target ACOS of 30%.

Using the Keyword Revenue Per Click calculation:

• Keyword A: $2.00 × 30% = $0.60 optimum bid

• Keyword B: $0.50 × 30% = $0.15 optimum bid

The system calculates a different optimum bid for each keyword based on its revenue-generating performance.

This allows you to optimize bids according to individual keyword performance rather than applying a uniform adjustment.

Important considerations

If you use Amazon's Dynamic Up and Down bidding strategy or Top of Search (TOS) placement modifiers, the effective bid and resulting performance may differ from the base keyword bid calculation.

To account for these adjustments, you can use:

• Normalize Bid by Placement %: Accounts for placement bid modifiers when calculating the appropriate keyword bid.

• Dynamic Up/Down Factor: Accounts for Amazon's Dynamic Up and Down bidding strategy.

Learn more in Normalize Bids Based on Placement Modifier and Dynamic Up/Down Strategy.

This approach adjusts keyword bids based on their current ACOS compared with your desired ACOS.

Unlike the conversion-based approach, it does not calculate an optimum bid using historical keyword conversion performance. Instead, it evaluates whether the keyword's current ACOS meets your desired ACOS and applies the predefined bid adjustment when the rule's criteria are fulfilled.

You can configure bid adjustments using:

• Fixed Amount ($): Increase or decrease the keyword bid by a specific dollar amount.

• Percentage (%): Increase or decrease the keyword bid by a percentage of its current value.

These adjustments follow the conditions and actions configured in your Bidding Rule, rather than calculating an optimum bid based on Target ACOS.

Example use case

Suppose your desired ACOS is 30%, and you've configured a preset rule to reduce keyword bids by 10% when their current ACOS exceeds your desired ACOS.

When Keyword B exceeds your desired ACOS, the preset rule reduces its bid by the configured percentage.

The preset rules then observe the keyword for seven days before making subsequent adjustments.

This approach is useful when you want to apply consistent, predefined bid adjustments based on your desired ACOS rather than calculating an optimum bid for each keyword.

Important considerations

Because this approach responds to current ACOS, changes in placement modifiers can also affect its behavior.

For example, suppose you increase your Top of Search (TOS) placement modifier. Your overall ACOS may increase even if the keyword's conversion performance remains unchanged.

The preset rule may then interpret the higher ACOS as a reason to reduce the keyword bid.

Potential downside

• Good-converting keywords may not receive additional traffic, even when their underlying performance remains strong.

• Poor-converting keywords may not have their traffic reduced if the configured conditions do not adequately address their performance.

Consider this behavior when choosing this approach, especially if you frequently adjust placement modifiers.

Both approaches help automate keyword bid adjustments, but they differ in how they evaluate keyword performance and determine bid changes.

The right approach depends on how you want to manage your keyword bids and what you want your automation to prioritize.

Choose Based on Conversion (Target ACOS) if you want to:

• Optimize bids according to individual keyword conversion performance.

• Calculate optimum bids using actual keyword revenue per click when available.

• Give better-performing keywords the opportunity to receive more traffic through performance-based bid optimization.

Choose Based on Current ACOS vs. Desired ACOS if you want to:

• Apply straightforward bid adjustments based on current keyword ACOS.

• Increase or decrease bids by a predefined dollar amount or percentage.

• Follow a more controlled bidding strategy without calculating an optimum bid for every keyword.

Neither approach is universally better. Consider your campaign goals, bidding strategy, and how much you want individual keyword performance to influence your bid adjustments.